Capy aims to be a billion-dollar company (and potentially it can)

Capy, a Tokyo-based startup founded by Mitsuo Okada and later joined by CTO Koki Shimada, is building a company that is disrupting online Captcha. Rather than using slanted or blurred words as Captcha, Capy creates simple puzzles to help identify if a user is a real human or a bot.

While text Captcha has served us well, they are unfortunately penetrable, Okada explained. For example, if you use the Rumola Chrome plugin, you can solve many Captcha automatically without even touching your keyboard. Capy’s puzzle Captcha is harder to automatically bypass.

Okada claims that no one has yet been able to crack his puzzle Captcha. The demo displayed on his website, he said, was made simple for users to understand what Capy does. The real (and perhaps secret) technology isn’t shown on the demo site. So folks who thought you might have cracked Capy’s Captcha: you have been misled.

More than just puzzle Captcha

Capy’s Captcha goes beyond just solving simple puzzles. I was given a chance to see the real Captcha that Capy is developing in exchange that I keep it a secret.

What I saw, I can say, looks really promising.

I’m obviously no venture capitalist, but I can foresee investors being willing to bet on Okada’s creation. When asked if investors have approached him, Okada smiled and said that they were backed by renowned entrepreneur William Saito and JAFCO. He also revealed that there is a long list of investors who are waiting to invest.

“I believe we have enough Japanese investors. We are hoping to get top tier Silicon Valley investors. We are going to eventually move to San Francisco,” he said.

Big dreams, big market

Having studied at the University of Oregon from 1998 to 2002 , Okada is fluent in both Japanese and English. After graduation, he went back to Japan for his PHD at Kyoto University, specializing in IT security. His specialization got him to start thinking how he could change the broken Captcha system that majority of the world is using. In fact, Capy was started in 2010 as an academic research project while Okada was at Kyoto University. But Okada has big vision, something that he picked up during his stay in the U.S.

When I was in the U.S, everyone is building a company and I believe I can do it too. I can change the world by myself. Capy could be a billion dollar company.

According to Okada, the world uses over 8.4 billion Captcha every month, and about 10 percent (840 million) of users give up on solving text-based Captcha. The opportunity loss, assuming a cost-per-action of $2.00, is $1.68 billion per month according to Capy’s calculation. In comparison, Okada says that the drop-out rate for Capy’s puzzle-based Captcha is less than two percent.

Capy’s business model is straightforward. Companies can use Capy’s Captcha for free with someone else’s advertisement as the puzzle. Alternatively, the companies can pay a premium (for about $0.001 to $0.005 per impression) to have their own image as the puzzle. Starting just last December, Okada revealed that there are already two paying customers and 10 other customers testing its service.

What we see on Capy’s website is just a tiny bit of Okada’s vision, and he insisted that I keep my lips sealed for the time being. “We will let you know when we are ready,” said Okada.

For folks who are interested in joining Capy, Okada said that he is looking for engineers, designers, and also an admin assistant. “We are trying to hire talented people. Our language is English. Japanese is not necessary!” he said.